All of the Following Fringe Benefits Paid for by the Employer

question 54

Multiple Choice

All of the following fringe benefits paid for by the employer may be excluded from an employee's gross income except

• A)discounts on services of 25 percent.
• B)subscriptions to professional publications.
• C)recreational facilities on employer's premises.
• D)company-paid parking costing $225 per month to non-employees.

Recognize the issues associated with using external market prices as a basis for transfer prices.

Interpret the effects of transfer price changes on division profitability.

Analyze decisions involving transfer pricing and their implications for company-wide coordination and profit.

Understand the characteristics and advantages of functional organization in firms.

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Definitions:

De Jure Corporation

Latin for “lawful corporation” a corporation that has met the mandatory statutory provisions and thus received its certificate of incorporation.

De Facto Corporation

A company that acts like a corporation and enjoys some of its benefits, despite not being duly incorporated according to statutory requirements.

Corporation By Estoppel

A defective corporation that has conducted business with a third party and therefore cannot deny its status as a corporation to escape liability.

Double Taxation

The imposition of two or more taxes on the same income, asset, or financial transaction, often referring to income taxed both at the corporate level and personally.